JVM Lending Blog

Rates Improve; What to Watch for When Bidding on a CONDO? Flood Insurance

30 Year Fixed Rate Loan at a Cost of One Point: 4.875%*

Rates improved Friday and today largely because money left the stock market for the bond market (“flight to quality”) as a result of the Government’s Goldman Sachs Indictment. Goldman’s troubles are our gain.

Congress recently extended funding to FEMA, restoring the availability of Flood Insurance. Transactions in need of flood insurance have been for on hold for the last 2 weeks across the country because Congress “forgot” to fund FEMA before their Spring recess.

When bidding on a Condo, there are numerous criteria to check (Complex FHA approved? Fannie Mae Approved?). Other criteria include Owner Occupancy Ratios (Over 50%?); HOA in Litigation?; More than 10% of Units Owned by One Owner?; No More than 15% of Units Over 30 Days Late with HOA Dues (this comes up often now).

Even if a complex strikes out on many of these criteria, financing can still be obtained with a 20% Down Payment, and a “Limited DU” Approval in most cases. With such a Fannie Mae approval, many of our lenders require no condo documentation, and we can therefore ignore HOA delinquencies and other issues.

*The above rate quote has the following assumptions: $400,000 Loan Amount; 20% down payment; credit score above 740; property is SFR; borrower has sufficient income to qualify; APR is approximately 0.20% higher than quoted rate for a $400,000 loan. Estimated closing costs affecting the APR include $4,595 for Origination and Processing Fees, $850 for other Lender Fees; $1,400 for Escrow Fees, and $1,000 for Prepaid Interest.

Call Jay Voorhees or Heejin Kim at (925) 855-4491

Real Estate Broker, CA Bureau of Real Estate, BRE# 01524255, NMLS# 335646